Sep 10, 2015

By Marina Blickley

This past Monday (Labor Day), President Obama signed his latest Executive Order implicating federal government contractor employment practices and increasing required benefits for their workers. This most recent Executive Order requires contractors and subcontractors to provide employees with one hour of paid sick leave for every 30 hours worked up to 7 days per year. Under the Order accrued sick leave must be available for the employee’s own illness and preventative care, caring for a family member who is ill or attending medical appointments, or absences related to seeking medical, legal, or other assistance for domestic violence, sexual assault, or stalking of the employee or their family member. Employees are required to provide advance notice of at least 7 days if leave is foreseeable. However, employers may only require a medical certification if an employee is absent for three or more consecutive workdays.

Importantly, this sick leave requirement is in addition to a contractor’s obligations arising under the Service Contract Labor Standards (formerly the Service Contract Act) or Davis-Bacon Act and contractors may not receive credit toward their prevailing wage or fringe benefit obligations under those Acts for the paid sick leave required by this Order.

The Order also requires that sick leave carry over from year to year. Although accrued but unused sick leave is not required to be paid out upon termination, if an employee is rehired within 12 months of separation, accrued sick leave must be reinstated for that employee. Thus, record keeping will also be an important aspect of compliance with this Order.

The President has instructed the Department of Labor to issue regulations implementing and interpreting this Order by September 30, 2016. Thereafter, the Federal Acquisition Regulatory Council is instructed to issue regulations to include a clause consistent with the Order in the FAR. The Order is expected to generally apply to covered contracts where the solicitation is issued on or after January 1, 2017.

This is just the latest in a series of Executive Orders focused on federal government contractor employment practices. Prior Orders increased the minimum wage payable by contractors, allowed discussion of compensation amongst contractor employees, required contractors report on compensation practices and employment law violations, and provided for nondiscrimination based on gender identity or expression. This new Executive Order and its implementing regulations should be monitored for compliance. There are a number of areas that are not addressed within the Order itself that should be addressed in the regulations. For example, potential exclusions, specific recordkeeping requirements, and enforcement measures. In the interim, contractors should review existing leave policies to determine if revisions will be necessary.

The text of the Executive Order is available here.

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